Search form

You are here

As the stock market continues to trade at 15-month highs, Sabrient’s SectorCast-ETF model is getting even more defensive, even though we are in a historically bullish time of year. The fundamentals-based quantitative model has a GARP (growth at reasonable price) focus, and this week there are significant changes to the sector rankings.

There are five bullish signs coming out of corporate suites that indicate we're headed out of the recession and into a sustained recovery, according to Samuel Fromartz of Fidelity. The signs include insider buying, and Mr. Fromartz points to the Claymore/Sabrient Insider ETF (NFO) as evidence, mentioning that NFO has risen 105% since the market low in March. Read the entire article here.

I’ve been reading prominent market pundits predicting everything from the “Crash of 2010 coming” to “Major surge ahead.” With such divergence of predictions, it seems like a good time to remain conservatively long/short in accordance with Sabrient’s SectorCast-ETF value-oriented model.

It was yet another week of hanging around the1100 mark with the S&P500. It's not that there weren't important developments during the week. The trade deficit narrowed much more than expected, and retail sales got a substantial boost in November. Retailers alone sold $314.1 billion of goods, 1.4% more than in October and 2.2% more than a year earlier.

Given the recent market weakness, it’s no surprise that Sector Detector’s long/short portfolios have outperformed. This week, Sabrient’s SectorCast-ETF model remains defensive. Of course, the underlying quantitative model isn’t aware that we are entering a time of year that is traditionally bullish. It simply reads the data and tells us which sectors appear to be relatively overvalued.

The market ended last week in a good mood, but is still struggling to gain enough traction for a sustained breakout beyond 1100 on the S&P500. The question in everyone’s mind: Is it simply consolidating in preparation for a big Santa Claus rally? There are certainly plenty of market observers on both sides of the fence.

Last month, I posted that net insider trading transactions had turned positive for the first time since May. Updating this for the week ending November 27, it appears that optimistic insiders again outnumber pessimistic ones.

As the stock market continues to trade near its highs, Sabrient’s SectorCast-ETF model remains defensive, given its GARP (growth at reasonable price) focus. The top and bottom ranked sectors remain the same this week, but there was noticeable movement in the middle. In particular, Information Technology is dropping while Telecommunications rises.